why are we cutting everything else? this is the best our government can do? it's an embarrassing day for the country. i'm sorry. >> henry, thank you so much for being here today. and thank you for being here for the last two days. >> you make it easy. >> bring your pants back on. help the show. >> do you know the context of that comment? >> that was the 6:00 a.m. hour. >> that ought to go over well. >> make sure you join us tomorrow. right now it's time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer who is tasting mcdonald's new breakfast lineup which we'll talk about this hour. got a triple whammy of dow, dupont, trafrlers, utx pretty good as futures are on the rise. day of reckoning, some have said, netflix soaring after last night's results. in europe, weak pmis out of

germany, china, too, but the european markets are pricing in higher expectations this morning for a rate cut from the ecb. our road map begins with users streaming internet flicks, the house of cards paying off for the company and shares skyrocketing for the company. is it too late to buy the stock. >> we're counting down to apple's earnings report and that will be after the close. the shares over the $400 mark. one way or the other. >> luxury not dead, at least not according to coach and we'll dig deeper into those numbers. >> u.s. airways and delta beating those numbers. >> not quite as sanguine. we'll take a look at the airline sector and talk about travel turbulence a bit, as well. >> definitely not comericcal. >> for the first time since september 2011. the video streaming service

posted quarterly earnings of 31 cents and well above estimates and said it added 2 million streaming subscribers in the u.s. helped by "house of cards." people, jim, this morning are saying netflix became hbo faster than hbo could become netflix. >> 30 million. internationally you got more than 30 million. i don't think people realize how non-promotional will this conference call was. it really was. they said, listen, the reason why we did well is -- no, it's a combination of things. we didn't lose people after we made the change. people do like "house of cards." they're looking toward arrested development. it's coming together. we could be better than hbo, and i found myself thinking this company has gone from being over promising and underdelivering to be one of the amazing underpromiser and overdeliver

overdeliverers. >> they laid out the number of households that signed up, watched "house of cards" and also canceled, fewer than 8,000. >> they have a show coming out for the people bearish on netflix, right? >> it's kind of like, i've got the new mcdonald's smoothie, the bears have hemlock short of netflix. >> and there were plenty of thesises. >> they checked off a lot of the boxes whether it was subscriptions or bringing costs down which i think is an important part of this conversation that investors were having this morning. they've become more powerful with the negotiation with their content provider so they can go to the viacom and saying we're not paying for stuff that nobody watches. we know exactly what customers watch. we have perfect data on that. we'll pay for what we want and therefore we'll be able to bring

our costs down and that's an important component of the earnings report. something to watch for the programmers. the viacoms of the world will say we're not going to be an issue. keep an eye on time warner and hbo, and the margins are better than netflix. you talk about how they could potentially raise it. >> who would notice? get as many subscribers as you can, but one has to wonder whether one operating with the business margin. >> they have leverage. i've been waiting for netflix to have leverage which is their costs coming down a little and their viewers are going up. >> carl, are you even sensitive to the price you pay with your netflix? >> with this new product offering of multiple streams for the family and you might crack down with those sharing a password with another account. if you want to watch four

simultaneous streams and people getting a kick out of it. >> it's now worth $1.1 billion or more. >> isn't that fabulous? >> incredible. >> people saying at the time he bought he might not have been thinking he might have hung on this long as a pure play. is icahn a new value investor? that's the new running joke this morning. >> one of his great investments easily. when he can get a triple and more than a triple. overnight. 300 million bucks. they also at netflix are focused on exclusivity and we should also mention that. remember they lost the starz deal and then they went to disney. >> when you said it on air i basically dismissed and i said now they're paying more for disney. >> and that was moves and not tv content. >> you said that was the beginning of netflix being able to be a little bit more

discerning and getting the content and it turns out that i think a lot of people recognize, you know what? not only do they have better content, but i can watch it if i want and if i want to crack into one of these series, i can't live without them. like downtown abby. >> that went to amazon and that was exclusive to amazon. >> you will see battles. >> and with 30 million subscribers, you can push your advantage. >> the question we promised at the top, is it too late? 216, a lot of targets are 225. >> one of the things that's been disabling about the analyst community is they're recommending at 180 and they boost the price target and they get it juiced again. i do think if you come in -- i've never recommended a stock up 40. i just can't do it. you're talking 11 billion dollar company not including the off-balance debt and some of the debtors can convert and there is a tcb conversion, and i think

people are recognizing that this is a company that may be a bargain versus other entertainment companies even though it doesn't really earn any money and the free cash flow. it feels like amazon to me. when i talk to investors many of them have a hard time to figure out what to focus on. >> except that they're ramping the subscriber growth, but they've gotten through them and you make a decision as to what you want to focus on whether it's sub growth or profitability or, you know. >> there's something going on which is this element of love by the consumer. look, as i move my mcdonald's new all-white -- >> off of your dell computer. >> i'm moving it over to david. >> lulu lemon is love. >> let's use this as a netflix analogy. they recall these pants and

everyone says holy cow, that's an issue. the consumer seems to like the fact that netflix and lululemon care about them. reid hastings at netflix switched gears and they said they don't like me right now. i want love. >> love! >> and he got love and love means higher stock price. >> let's talk a bit about a lower stock price which has been apple for the last seven months or so. wall street bracing for the big earnings event of the day and that will be the after the bell results from apple. shares of the company are down 43% since the september highs. that's what a loss of $290 billion in market value. analysts do expect the iphone maker to post its year over year quarterly earnings decline in a decade in the wake of the competition from the like of samsung. for both fiscal q2, current quarter, do we get any word about future products?

so many questions. >> i think it's the latter. >> it's going to be ten, but it's going to be 9 and we have to get away from this quarterly analysis of apple. what we need is them to say we have a killer new device. you'll never look at samsung again. that's not going to happen. >> i'm not in the anything. do you believe that's going to happen? that's a new device? >> that's what we need if we have to get this thing an eight multiple. >> which is pretty amazing. >> you said this morning from the analyst reports you think they were going to lose money. you think people are being unfair. we need to see -- you know -- apple's become those people in the apple ad, those weird apple ad at the super bowl and samsung's come along with this

hammer and broke -- they're all apple executives and you need to see apple come up and say, you what? we have it. we have the holy grail which is a combination of this thing that you need and that thing you need. we'll focus the numbers and we'll focus on texas instruments. is it a numbers story? is apple just another stock and if it's another stock then maybe you should get a nine multiple and go higher, but i would like to see, look, if mcdonald's can come out with killer products, apple -- are they both technology companies? is that where we are right now? >> apple has come out with incredible products. amazing products that have changed the world. >> that was the old days and the yankees used to be -- >> the ipad is only three years old, man. come on, give them a break. >> no. the market won't give them a break. i like the product, but who am

i? >> that's complicated. >> it was not a rhetorical -- you know, we're not trying to figure out exactly whoi am. >> oh, okay. >> what we're trying to figure out how do they make i tunes better and how you want them to come out and say samsung, you're history because we have this. instead of samsung having, what? eight pages. >> you're not going get that in an earnings report. >> someone innovates and someone else comes in with a pretty good or good enough and that's why people are talking about the lower end and the medium end. >> there are some people who their samsung phones have technology whether it's the ability to change language quickly and a number of different inon advisivations the is better. >> not that they earned nine, get off the treadmill and open our eyes to the omg products

that you say you have. >> do they do that often during an earnings call? >> if you stay tuned to us, in another month -- how about a little pizazz? do you remember the steve jobs? he had pizazz. >> tim cook have pizazz? >> is he more of a coo than a ceo as some suggested on this show yesterday? >> pizazz? where are you going to get this pis as? >> i don't know. i don't work at apple. i just want to see some pizazz. i want to see some reed hastings and underpromising and then blow me away. my takeaway from netflix, how can can i not be watching "house of cards" and i'm not missing "arrested development" and that's all there is to it. do you remember when "the sopranos" came out? all of a sudden, i have to get hbo. i have to pay up because you come in on monday and everyone had "the sopranos." what do i do?

i guess i have to subscribe. i feel the same way. >> you and i were both watching "the wire." they did the program that was cerebral that people now watch. >> and alpha house, the new series from amazon is going to work. >> amazon doesn't like to be bested. >> i like to see apple be feisty. >> you like to see them watch something big. >> it's okay to buy someone who is better than you are. the really great people go and buy a company that's better than they are and say, help us, they are -- excuse me. a lot we haven't covered here. we haven't explained why you're having mcdonald's. >> because it's darn good. >> we'll reinvent their breakfast lineup and we'll talk about coach and other name, when we come back, delta and u.s. airways will beat earnings and how will future profits be affected by the sequester-related furloughs.

did you hear about jim's flight yesterday? you will, trust me. constellation brands becoming a player in the u.s. beer market. david will talk to rob sands in an interview. we have the component earnings from dupont, traveler, utx and other names we'll talk about after the break. tired, achy feet draining your energy?

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the high-end handbag and accessory retailer earned in the fourth quarter. coach said comp store sales in china rose at a double digit rate. the company upping its annual dividend 13% to $1.35 a share. margins look pretty good, jim. north america up one. >> @jimcramer on twitter i went to a series of coach stores and took a picture of the shoes. i was widely ridiculed of having some sort of fetish for the shoe. >> foot fetish. >> for rex ryan. >> that's true. as opposed to the team itself which doesn't ask it's very clear from the release that the shoes matter tremendously. the look, the feel, they changed the stores and talk about innovation. it's a little bit of an s.a.t. question. shoes are to coach as "house of cards." is to -- >> netflix. i'm really happy i answered that. i feel very good. >> my day is done. >> you should have asked the

jeopardy, what is shoes. >> i'm hoping to get back on that show. >> what was the other fellow that beat you? the guy who did, like, $1 million. >> that was his name? what do we make of the departure, reed crackoff, the creative designer and, you know, it's a change in management. >> i thought that was surprising because the $1500 bags that i bought people for the holiday gifts, insane, frankly. i didn't know. i went in and it looked like that handbag is great and then you get to the register and there goes every present i'm going to buy. >> how do you admit this is intimidating, but you ask. how much does this cost? >> i should have done that. >> yes, you should have. >> do you ask? this is a high-end product. >> nothing, the idea that you'll pay $1500 for something to avoid

embarrassment. >> it was insane. it was insane. i had no idea how much -- these handbags are expensive and it was pretty much the end of the holiday season. >> the stock was down 8% for the year until this morning. is this a trade? is this a short-term balance? do you trust victor luis, this new ceo? >> i think that they needed some new blood. i i would have liked to see have seen the reed krackoff sign. there are people who don't like to throw up at the register and they thrive on that. i do think the shoe strategy is a real one. >> i think you always go with the guy with two first things. just a rule. >> my father always said don't trust a man with two first names. >> chris paul, one of my favorites. >> great basketball player. >> with 1.1 seconds and he's buy being the fabulous reed crackoff

guys and every wife of every nba player gets a bag. >> helping to make a run for some profits and his mad dash is next. the dow tries for its 15th consecutive up tuesday. a lot more "squawk on the street" is back in a minute.

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>> more than seven minutes before the opening bell. time now for cramer's mad dash ahead of the market open on a tuesday on the nyse. let's talk about the airline industry and your own experience. you know i like the airline industry and this is the first time i recommended on air because it's become a slap happy oligopoly. price competition almost nil in some of these roots. at the same time, not to be too anecdotal and yesterday i'm flying back from orlando and the plane is in the gate. the doors are shut. we know we're leaving 3:30 and headed to kennedy and then a pilot says because of the sequester -- >> he said that? >> and then he came back and said listen, the sequester. the faa told us they don't have enough people at kennedy so oui not taking off. i said you have to be kidding me? i'm sorry. wield have loved to announce it to people so you could go mack your calls, but the faa has

ordered a full stop and we are not allowed to do anything and we have no idea until two minutes ago. >> what about the sequester's impact in a real way on ticket sales particularly for government employees and the like and travel will? i know we reported decent quarters and i know we've been talking about them as investments for the first time ever as opposed to trade. >> there is a concern for business travel and leisure travel. >> the board says on time, and they have no control of whether it's on time. suddenly on time means nothing, david. on time means nothing because if you look at it they don't know. i said, come on, delta has to know. the faa said please tell people it's because we're shorthanded and we don't want to be shorthanded in kennedy when you land, and i thought that was wise. i too, would like enough air traffic controllers to handle kennedy opinion it seemed like a legitimate safety concern, and it also seemed craze. >> perhaps it's an effective way

of reaching people and getting them to actually call their congressman. >> well, the many of you heard about sequester. the faa has instructed us to use that turn. we just don't have enough people. it's rush hour and they don't have enough. they didn't plan it right and they're thinking, what kind of operation is this? it is almost like a reid crackoff, so if your plane is going to x you won't miss that either. i'm thinking the faa budget they just decided to make it so kennedy. it seemed disingenuous, but the faa wanted our planes know because of sequester. >> the pilot it is they told us

to use the word sequester. >> we've got to go. you heard from netflix and apple is on deck with earnings after the bell. what is the next cere two technology companies and how will we see things trading today? the opening bell just a few minute away. [ female announcer ] what if the next big thing, isn't a thing at all?

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you are watching cnbc's "squawk on the street" live from the financial capital of the world. the dax is up 2% even after a miss on their pmi. >> i think that this belgian -- you're trying to see a real rebellion against austerity. when you see china numbers aren't so good and interest rates are up 4% in italy. it's no longer limiting principle. they have it to borrow money and start putting people to work. i think the rebellion against the austerity policies is beginning and that's hopeful. >> that would be a strategic u-turn for the ecb. >> what is that? mandated depression? once german auto sales came back. wasn't that the tale? the germans were hurting and

that gemini was not working. >> that's a good point. you thought maybe stand above all of the other lesser economies and the news did start to tighten. >> i thought it was the most important article in the paper. maybe they're breaking ranks [ bell ringing ] >> and his own jack lou? >> hard to tell. >> they are geniuses. >> i took economics, and i couldn't wait how long they were. >> there's the bell. s&p at the top of the screen. state street global advisers and blackstone celebrating the recent launch of the spider, senior loan etf. the texas independent producers and the royalty owners association doing the honors. you cannot start this market day, jim, without talking about

netflix. a 25% move is a big move even on that name. >> that was a big short position. there was not a lot of stock that was out there. it's a very tight flow. >> a lot of people kept thinking that this is the quarter where we find that the bulge in new subscribers wasn't happening and there are other people who immediately point out, look, the cash flow is not that good and the 36 analysts who cover the stock only six are recommending it and that's pretty incredible. >> so is the market cap now eclipsing $12 billion for netflix and the market cap that was $4 million. >> microsoft wanted to make things exciting. i'm finding the deals that are not done are proving just as important as the deals that are not done. >> what would have happened if intel swallowed its pride and accepted the fact that, yes, you have to pay a lot rather than buy mcafee. >> i'm sure intel can say that

was fabulous. >> everyone says everything is fabulous. >> is anything ever not fabulous? >> it's always fabulous and you never know, of course, what problems you'll introduce as a result of the acquisition. you cocompletely screw up another organization when you buy it. you can't always assume you go and buy netflix and everything's great. >> autonomy bought that. you sometimes don't know what you're buying in the beginning. >> true. you've got so many that history is littered with bad deals and that's a great deal. >> how do you get your multiple up from ten, 11 to, say, kimberly-clark multiples. >> where is kimberly-clark's multiple right now? >> oh, about 19. >> 19 times. >> they had a better-than-expected quarter and the balance sheet is good. they have a good dividend. what do you need in a stock, david? what do you want the stock gods to give you? >> if i'm paying 19 years' worth of earnings for kimberly-clark,

that's okay. >> that company is a juggernaut and when those who get in front of juggernauts because they're not happy with a 3.6% yield because in an uncertain world the first national bank of kimberlark is better than the first national bank of bank of america. >> we talked about heinz, for example, and how that deal looks even now given the multiple increase that we've seen amongst the consumer staples. he's getting that on the cheap. >> the joke yesterday was apple should start selling apple so you can put a food multiple on apple. that's not bad. frozen apples and how about apple jerky? >> does it really make sense? >> no. of course, it doesn't make sense and to use another $5 worth, facetious. >> i'm talking about the larger concept. the idea that you have multiples

that are double that of apple computers. >> let's talk about mexico, 52-week high. what does pepsico have going for it? >> it has global reach and a new series of products that is absolutely working and recurring revenues as a result of loyalty that is not going away. >> regulatory headwinds, you might argue. >> if they merged with it, they would take over the world. >> and a good yield. it's kind of like what they want right now -- look, if you take a look at air products today. what kept air products from making the number. then they said there was weakening in china. what the heck is left? greenland? >> last remember, remember the pain was about textron and other industrials. upx was okay?

dupont, okay? j.p. morgan ups caterpillar today? >> this is a lowered expectations when it comes to caterpillar. it was a 12 multiple for you. i thought the sequester would make them miss and dupont, ag was great and coleman really delivered. she said there would be a lot of savings and my charitable trust had dupont and now they raised the dividend and you the good yield that people want so badly. to me, you're getting a sense of what this market upons. it has good yield and once dom effortic. look at target. target is up $is 1.50 from where it told you things were weak. how do you get that? >>. >> i don't know. >> how is coach up five? the shoes are obviously -- the consumer in the united states is feeling better. housing prices are upon. >> don't your instincts tell you this thing is starting to get

played up? this theme and maybe i want to take a look like jeff said at microsoft. maybe i want to take a shot at the tech names that are beating things down and are cheap. >> how about the fact two analysts downgraded microsoft to a sell ahead of the quarter. >> >> that was obviously what i call a mistake. >> i mean, they weren't early. they were wrong. we're sorry. no, i don't think they did that. >> speaking of sells. >> merrill does go to a sell on yum which is one of the worst performers on the s&p. >> yum has problems. >> it's all about chicken and china. >> yeah. it's not about the boneless chicken that i like so much. it's more of a -- and david novak will triumph over this, but china's got a lot of problems. >> look, china has see-through buildings and china has chicken they don't want.

i don't know. i don't know. >> and the pmi at -- >> is that another lulu problem? >> customer loyalty. there's not a lot of customer loyalty when you have that problem with the chicken. >> that's true. they don't make the chickens without bones. they went out to try to grow chicken. >> seedless watermelon? >> it's bad enough when they -- >> they can't walk as we all know. >> they have that thing. >> let's get to pisani. >> nice start to the day. four to one advancing in the declining stocks. i am very happy with the earnings report. i was very worried yesterday about the big multi-industry companies your illinois tool works and ingersoll-rands and your johnson controls and united technologies, concerned they might lower their 2013 guidance because those are the big, global companies and if you're worried about global growth they're the ones who will tell you immediately, it didn't happen. that is a tremendous relief.

not a single one of the big companies i cared about lowered their 2013 guidance. that's the big story today. leaving it unchanged how about the details? i followed 19 companies in the last 24 hours since reporting. at&t beat on the bottom line. a lot of them including the companies were light, though, on the top line and you know that's been a recurring theme for a long time. utx predictably talked about weakness in europe. that's, of course, the helicopter division, but they highlighted what we already know. no change in 2013 guidance for utx and ingersoll rabd and johnson controls and a couple of them were cautious in the third quarter. so ingersoll-rand and cautious auto second quarter. what's happening now is the big, international companies are relying on the stepping up in business in the third quarter. >> no change in the overall guidance for the full year.

that will be the big story and a little pressure them to start performing. elsewhere, stmicro had a good number and texas instruments tried it incrementally higher and even on the tech side not that much news a both did better than expected and we're seeing revenues to the upside and passionate revenue guidance for april was a little bit and overall these numbers were pretty good. i'm pretty happy with them, andy think we ought to talk about caterpillar. you saw jp morgan upgrading caterpillar and the stock has gone from $80 to $100. elsewhere, i want to talk about the homebuilders. barclays upgrade the homebuilders. bottom line is it's up from neutral and the stocks are all trading to the upside right now. china's flash pmis did appointed

a let and we're still getting choppy news, and i thought it was very interesting, guys, that goldman sachs, after shorting gold, exactly two weeks ago decided to cover their position. we don't know for sure, but for all of the flack that goldman sachs gets and all of the cynicism that's directed for them, you have to admet, jim, this was one of the great calls. they called this absolutely perfect and the call itself influenced what wassing about on, but still, brilliant wall and it recovered almost 50% of the losses. >> that was a home run that came in at 4:30 in the morning. gold is going right down. it took my breath away and it was one of the best calls i've seen from wall street. >> let's shift to the bonds and the dollar and rick santelli at the cme group in chicago. >> hi, jim.

we all know that various branches and forms of government around the world are involved in trying to buy sovereign securities. while they're having some decorum of success, add in spongy economy. look at a two-day chart of the ten years. for a while we were dabbling with the 164 yield and open it up to december 1st. should we close anywhere under this 168 level? and they a good chance we may, we'll be extending the last time we've seen levels this low on rates in a 10-year going back to december, but look to europe. let's paint the land 16, and if you look at these flash pms no matter which region they're disappointing and it's a long run below 50. so you look at the boon. the boon briefly touched a 116 yield and how does that stack up with history? open the chart up to july 1, 2012 and the lowest yield close

and the ten-year boom is around 116, 119, that's pretty darn close. how does this data affect the currency market? this is even more interesting. it goes to show, when we talk about the bank of japan or some of the g-20 issues of japan. these are the issues. how the markets are convoluted so we see the euro versus the yen is going up. forget the data and now look at the euro versus the dollar. remember the data and compare it to the weeds in europe. it's very difficult to trade markets especially on a day when you see how weak the data is. jim, back to you. >> the german fund. they could do a trillion dollars in bonds and somehow start the economy. you are spot. what a crazy bunch of crisis impeach my score, sharon. everyone is in agreement that

this call from goldman sachs two weeks ago for quite some time and definitely some of the traders on the floor and the fact that they're not covering their position. they're pointing to the -- and they came out of the largest gold etn just last week and they expect to see a reaction cell raising in u.s. growth later this year as we see further weakness in gold prices. keep an eye on gold right now and we are seeing a slight pullback after the three-day gain in gold. we are also looking at other commodities and as bob mentioned again, china data very important to what the industrial commodities are going through this morning and the fact that we're seeing weakness has a lot to do with concern about manufacturing in china as well as the eurozone and we're also looking at concern about oil demand in china and that is another factor that is weighing on crude prices. back to you.

>> thank you very much, sharon. >> when we come back, what are major players in the hedge fund doing to investors at yankee stadium. >> mcdonald's new menu items, will they whet the appetites of consumers and investors? jim has just finished one of them, by the way. we'll talk about them. >> good taste ppg i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles.

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. >> mcdonald's breakfast menu, customers can order any breakfast or platter with egg whites. it will be available starting tomorrow. we have a sneak peek of the new mcmuffin and a few of the new items here on set which i have not tried, jim, but you have. >> yeah. i remember speaking to mr. thompson. you know him quite well, at the

super bowl. he said i know you're a guy who likes my stuff. you have to try the new egg white. the cardiologists want you to have an egg white and a little carb in the morning. this is the answer. far be it from me to say, look, this is what the doctors want, but it is what my doctor wants. >> david, you're having a blueberry pomegranate smoothie. >> a smoothie aficionado. there's a great truck here i go to here every day? have my smoothie. it's quite good. i will tell you it's quite good. i love the vanilla milkshake from mcdonald's. i don't want to give that up, necessarily, but this is nice. >> 210 calories for a smoothie versus the strawberry has 800 calories. >> that's big. >> yeah. >> i buy mcdonald's on friday. i would have -- this is what i wanted. they post the calorie.

carl, it is a technology leader in food, right? >> it is an engineering company. finding ways to create a new item that tastes good that you can replicate at 14,000 restaurants at one time. this is hard. that's hard work. this egg white mcmuffin which you tried. 100% egg white and even with the canadian bacon and white cheddar it's 250 calories. directionally, they're trying to make a statement here. >> yes. >> i think this company -- theria a reason why i went from 85 to 100 because it has a great balance sheet and it has a great dividend and it has fabulous management, deep, fabulous management and that's why it's trusted worldwide. speaking of which, 99.60. it did crack a hundred, the stock that is. and we'll interview mcdonald's ceo don thompson who has not done a lot of interviews. >> only with you. >> one of the great larger than

life guyses who promised certain things to those of us who want to have that healthier menu and brought it more ahead. >> we'll talk a lot this week and with you guys about whether or not they're stealing share and what the concerns are in china and what the pipeline looks like regarding these products and others and it should be good. >> yes, you can put 100 of those mcmuffins in a reed crackoff bag and not spending a lot of money. >> what i think is interesting about the conversation is it is technology, in a sense. a lot of people like toic voek that and it's reinvigorating your product. >> are you talking about apple? >> i think sometimes we forget. this is food technology. the greatest technological advances in the country may very well have taken place in the oil industry, right? >> fracing. >> i was thinking you would go tang because that was nasa.

>> we talk technology all of the time and we think silicon valley, but it's not. >> there's an article today in "the new york times" and i had rich kinder on, core labs, why? they map reservoirs and find there's a lot more oil and gas than you thought. american company, this is the kind of company, and it's the government. i find that when you look at halliburton. halliburton has pioneered everything from great sideways drilling to fracing fluid that tastes every bit as good as that mccafe that does not have the -- >> that is not true. the fracing fluid does not taste as good as the smoothie. >> the hibiscus taste, had i cut the fracing fluid with belvedere. >> tequila! >> then we'd never -- i'd become an alcoholic fracing fluid plus

cuervo. >> fracing fluid from tequila. that will wake you up every morning. >> in terms of health, don't have the salt of the fracing fluid. that just boosts your blood pressure. >> that's true. >> thank you, halliburton. one fab drink. >> all right. coming up, we've got a ceo that wants you to bypass facebook. find out which social media company he runs. he'll tell you all about it, but first -- coming up, what's more fun than a pillow fight? how about cramer's six stocks in 60 seconds. don't stop just yet. you still have two minutes to land some nice hits. "squawk on the street" will be right back.

>> take a look at the dow chart up 120 or so at least a minute ago. now down 111. the dow has not had three losing days in a year. we're almost until may. what have we got? >> you told me tuesdays. average gain for tuesday is half a percent. this would be 15 straight. let's get six in 60 upon six stocks in 60 seconds.

>> let's start with -- >> bank on santander. >> deutsch raises biogen. >> celgene, gilead and these are the three horsemen of this era. this is an m.s. draw that's taken off. >> we've not covered travelers yet. >> david and i, david knows him better than i do, but this is a company where they have raised rates and had fewer payouts and that is win. >> deutsch sells newmontt. caterpillar has made a big bet on mining. is that a big get right now? i'll not sure. >> jc henny has had an effect. >> this is a company that eves itself undervalued and i think it's worth here and they have unbelievable natural gas off the coast of israel and cypr cyprus. >> tonight is the new set, and i've got to tell you, i know that when a lot of people said

after eight years of one set they're going to say something's changed. jim looks thinner. they don't really know, but that's the new set and thank you, cnbc, for investing in our hour. it means a great deal to me. kimberly-clark was questioning the valuation of kimberly. i did at 90, what a mistake. there was a quarter where it wasn't so good. he spells it differently -- >> he's praising it. because you praise him. >> we'll see you tonight and you do look thinner. >> oh, my god, thank you! it's the set though. >> new richmond, don't go away. platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. td: 1-80345-25 all this with no tre minimums. tdd#: 1-0-345-50 and only95 a.

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welcome back to "squawk on the street." march new home sales 417,000, that's a seasonally adjusted annualized pace and that is spot on with expectations and to give you some history, the 431,000 mark from january is the best since the fall of '08. so we're snugging up to that level, close to it. if we look at a contemporary read, april richmond fed, it disappointed at minus 6. we're expecting a positive number. the market doesn't seem to be

paying a whole lot of attention to either of these. europe didn't pay a whole lot of attention to some of their weak data. the docs are closing up on the year now. back to you. >> thank you very much for that. let's get reaction to those numbers. >> diana olick watching them. >> i think this is a great number, carl. it beat the street and they were looking for 314 and we got 1.5% and inventories we've been looking at a lot for existing home sales remain the same at a 4.4 month supply. home price and 247,000 and that's up from 239,800 one year ago in march. the homebuilders have to keep raising prices because land, labor, material, prices for them are all going up. we saw it in the sentiment numbers. the homebuilder sentiment dropping for three straight months because of these land, labor and supply issues and their costs are rising and that's why they go up, but if sales continue, that's still a

good thing for this, but we also have to remember starts. they were disappointing in march and we saw multifamily starts rise, but not single family. because those first-time buyers are being the competition from investors and all-cash buyers are pushing them out of the existing market and into the new home market. they've been trouble keeping up with supply of homes and 4.4, that's low, about you this is a good number, carl. >> nice after yesterday's existing number. that's for sure. >> thank you very much, diana olick in washington. we'll start with the tale of two techs. threat nics netflix soaring after adding fuel that fire and is it too late to buy the stock? >> the street is awaiting apple's big report after the bell, but with slowing growth and falling margins is the stock now a bargain buy ask one of the key metrics investors are looking for tonight.

>> from tech to services, constellation brans gotten bigger in the u.s. beer market. >> let's get back to one earnings mover that has absolutely rocketed at the open today. netflix announcing it has 2 million extra streaming subscribers here in the united states at eight bucks a month. shares rose $200 last night for the first time since february 2011. tony is an analyst at montgomery scott. he has a buy rating on the stock and a $250 price target. welcome to the program. >> so is it worth spending $100 million on two seasons of house of cards? >> absolutely. what you will see here is the company growing the total addressable market improving profitability and it improves the competitive environment even more. i think you have a great, virtuous cycle that's kicking in. >> that cuts to the fundamental question about netflix whether

it's growing fast enough to pay for the international expansion and to pay for the content bills that it's rack up. >> if you look in detail at these figures who which you have to still, the loss overseas is $77 million and the negative free cash flow is 42 million, tony. >> there are a couple of things that have gone on in this quarter. one, we do see these improvements in the use of accounts payable which in the cash flow and the u.s. streaming business scale better which should provide more cash flow and the dvd business is not declining as fast and these guys are managing the business pretty well. if i can on the international, it's down, but not down as much assy we expected and the way to think about that is maybe these international markets are getting to profitability sooner than expected and it may not be as big of a drag as people thought going in. they're focusing on traditional

valuation in the near-term. i think what the stock's telling you is people are looking that the on a terminal basis and the terminal value. what's the pricing leverage and both of those things look more optimistic and you have to discount that back for today and if you do it, the stock is still undervalued. >> what do you think that they'll bring costs do you think a bit. we should note today, viacom shares and cbs shares on news that it's in more of a power position when it comes to telling the content companies what it wants instead of doing what they want. if i had to pick out one negative, i don't like the fact that they're trying to pull back on some of the spend. we don't care about profitability and we care about sus take the sub growth. so by pulling out that content, i think you do risk that you see

a subscriber growth slowdown. that's when you saw the sub growth voe. it's a dicey move right now. >> tony, is this a trade or a long-term investment. netflix is currently valued at $12 billion. cbs is valued at 19 billion. is that right? >> yes. the reason being is say they get to 50 million subscribers out into the future in the u.s. you raise pricing by a dollar and that's $600 million and that's roughly 6 billion of equity value created in a single price action and that's a future price point and you have to discount it today and you look at sirius versus xm. >> they got a huge effort and they were on the verge of bankruptcy and you're in a position where they can grow

their sub base and that's because they have a monopolis c monopolistic, and it will drive out some of the competition and the fact that they can afford that by growing their sub base at the same time and whether they can reys raise their prices up for 2011 as netflix rises to the open. >> it's made a cultural norm for all of us and it brings us to this morning's squawk on the tweet. tweet thus morning at "squawk street" and we'll get your responses. it reported second-quarter earnings after the bell. shares of the tech company down 14% in the last month and hit a 52-weekly. >> senior equity research analyst as the 550 target on apple. >> the portfolio manager and

owns 120,000 apple shares. guys, good morning to you both. >>. >> let's take ourselves to 4:30 p.m. tonight. what's the first metric and what's the number. >> the first one we'll look for what the iphone numbers are and we'll take a look at 31 to 32 million units and that's where we expect the numbers to be and then we would look for where the guidance is and for the next quarter we are expecting guidance to be significantly below consensus. >> how much is siggive in cannedry? >> we're expecting guidance to be $8 per share for earnings and consensus currently is about 36 -- i'm sorry, 38 billion or so right now. >> patrick, certainly after caterpillar which people had been pricing in a miss, they did miss. is a similar scenario setup for

apple? have we prepared ourselves for that kind of guidance? >> investors have prepared themeses and then some. if we hit the $8 guidance i think that would be a very positive number in term of the eyes of the street. right now the stock itself is probably pricing in investor expectations that earnings will decline 20% over the next year and we earned it and we know we'll be ready for that. if they deliver a number anywhere near guidance like netflix is having today. >> oh, come on. not with that sort of game. you're not serious. >> no, i -- i really think -- i don't think that's the case that they will come in anywhere near guidance. i think i agree with the previous speaker that the number will come in far below guidance and the next number is far worse than that because everyone is waiting for the iphone 5s and the phone. so if it's $7 or lower, it wouldn't surprise me.

my point is that expectations do come in $8 or higher next kworter there will be more positive reaction in this quarter, in looking at your note, i'll bet you're talking to leverage the balance sheet and return the cash to shareholders and unlock share houlder value. your not focused on the idea that it is not a growth company. i a reesh yat your stock is hunkering down if i read you correctly. >> again, sir? >> listen, for the goat we need new product category from them and we're not expecting that this year and the new iphone refresh will be incremental and depending on how they execute. for growth, they get excited

about the stock and we need new product kate gory and that is coming next year. in the meantime, you need to embrace the value investors and it's important for the company to leverage its balance sheet, to return more cash to shareholders and to increase more dividend and to be a lot more aggressive on buybacks especially at this level when the stock has taken so much of a beating and that's what our point is, that for now they need to embrace value investors knunl they can clear new product categories and that's when growth investors will come. >> last question. you own 12 will 0,000 shares as the stock has gotten beaten up so far this year. >> what's your appetite to buy more ahead of the number? >> ahead of the number we're probably not going to be buying more. we exited that stock in the upper 600s, but the value case right now is very simple. with with apple at $400 a share. it's got more than $100 net cash

even after paying taxes, so you're paying $3,000, any earnings down 25% from what's expected. he put a ten p-e on that and this is a very cheap stock unless you believe that earnings will decline every year from here on out. that's ahead of the case and we're not buying ahead of it because we like the position that we have, you know, but we think it's an exceptionally cheap stock at this level. >> it will be one of the most-watched numbers of the quarter. thanks so much. >> thank you. >> switching gears, they were grossly negligent in the lead up to the brokerage firm's collapse. kayla tausche has more on this story which she's been following from its earlier days. >> it seems like it's been forever, david. we're getting a 61-page lawsuit

from the bankruptcy court in manhattan. it takes aim at john corzine and the coo and cfo breaching fiduciary duty as it entered a downward spiral in 2011. it seeks an unspecified amount in damages. trustees won approval for a liquidation plan. in a statement, trustee louis freeh says attempts at med mediation are ongoing, but it wanted to file these claims before the firm began liquidating. this is the first suit filed by freeh. the bank rupt see trustee in charge of winding down mf holding companying. the director filed one. scores of investors in 2011 and last year, james giden, the trustee who represents the customers actually join that investor lawsuit and then there are the various scathing reports from congress. we could go on and on, and nearly all of them claim the

stham corzine despite obvious in risk management and controls. it plugged gaps in revenue several quarters on end. the litigation will drag on and there are still no charges from regulators and the cftc's investigation stallinga ever the lead commissioner stepped down in march. the investigation is still under way. we reached out to a representative for mr. corzine and as of now, no comment. >> thank you very much, kayla tausche. >> a different kind of pitch at yankee stadium today. some of the biggest names of hedge funds like ackman, cohen and einhorn are pitching investors. we'll be live from the scene. constellation brands upping its game right here in the united states with full control of corona. the ceo rob sands will join us for an exclusive on "squashing on t squawk on the street." ♪

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♪ ♪ ♪ it's not baseball playerses at yankee stadium today. it's some of the biggest players in the hedge fund world. goldman holding the u.s. hedge fund symposium there and our mary thompson has the pregame from outside the stadium. mary, good morning. >> good morning to you, carl. as you mentioned, goldman sachs is hosting the big hitters from

the 2.2 trillion hedge fund industry today. earlier this morning we saw goldman's president and coo gary cohn come into the stadium and he's here to address the attendees of the symposium hosted by goldman sachs. it's akin to speed dating where groups of four to five potential clients who may include funds and endowments. they hear the 45-minute pitch before moving on to the next one. among the managers we spoke to going into the stadium. we spoke with passport capital's john burbank. he made a bundle and we spoke to tom wagner. some other marquee names in attendance, as well sac's steve cohen and he owns a share of the crosstown rival mets and he, of course, have been in the legal spotlight with several of his employees being charged with insider trading. cohen and sac have not been

charged and bill ackman, former ceo ron johnson is here as well along with saba capital's boaz weinstein. michael bloomberg is giving the speech today. comments from the mayor's office were not returned. we don't have word yet on who might be pitching or taking practice. it's a little bit cold for that, i'd say. >> i'm imagining they're in the suites and not on the pitch. >> oh, that's right. that's right. but you never know. they might go down there. that does happen, and it's my understanding of the suites that are around inside the presentation and that's where those presentations take place. >> mary thompson there at yankee stadium. >> meanwhile, cancellation is buying the grupo modelo who which is the largest u.s.

imported beer. >> would it add to the free cash flow. >> join us live for an interview next on ceo. we did number crunching and we'll give you the goods next. [ tires screech ] [ beeping ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze and recondition each one, until it's nothing short of a genuine certified pre-owned... mercedes-benz for the next new owner. ♪ hurry in to your authorized mercedes-benz dealer

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into america's largest domestic airline. we are southwest. welcome aboard. anhaeuser busch announcing it has resolved any trust issues with regulators. abnbev is selling the rights to improve the rights of grupo model on to constellation. one reason why it was able to move ahead after initially being blocked and it's a move that will transform constellation from primarily a seller of wine to one of the bigger beer

sellers in this country especially given its control of corona which is america's most popular imported beer. i am joined by rob sands and he's constellation brands president and ceo and he joins us from rochester. rob, first of all, when are you guys going to close the big deal. >> we expect to close around june, about the beginning of june. >> and you're levering up the balance sheet and it makes perfect sense in this environment. have you secured all of your financing for that and you are comfortable operating at a leveraged ratio at five or five and a half times ebitda? >> yes, we have secured all of our financing for the transaction and, yeah, we are quite comfortable operating in that range. the good thing about the beverage and alcohol business is it's very free cash flow generalive, so we expect to pay down that debt into our target range of between three and four

times debt to ebitda between two, two and a half years. >> that's pretty quick delevering. what do you see in terms of trends? >> does this bring more power to the other brands that includes a broader portfolio that includes a lot of the bigger beer names and not just a lot of wine? >> yeah, it does in many respects in that it positions us as the multi-category beverage and alcohol in the united states and it makes us the third largest beverage alcohol company, period, in the united states. so that gives us a very strong portfolio to go to retail with both on and off premise and, of course, it puts us in a very strong position with our customers. it's also a great portfolio. the beer business is almost

exclusively high-end brands and that's the segment of the beer business that's growing and think, we're the largest premium wine company in the united states, as well and that's the segment of the wine business that's growing. so we're in great segments. >> i'm interested that you say that it strengthens your position with the u.s. consumer. where is the u.s. beer-drinking public. they were worried that the top three beer makers controlled 75% of the market and in the words of the boj, abi would lead with price increases and it would just follow through. there was one challenger and that's the challenger that you bought. are you going to challenge abi on pricing as a result of this or are you just going go along for the ride and make excess profits and there will be higher beer prices across america? >> crown has actually been the third largest beer player for

quite some time and we've owned 50% of it since its formation? 2007. we actually owned 100% of it when it was called barton beers prior to that and crown has been a very competitive player in the beer market from a pricing perspective. our focus at crown has been on driving market share and driving revenue growth, so we expect to be a formidable competitor to both abi and miller coors. >> what is the condition on you doing this deal? i see you've been forced to increase your product facilities are there other prereshg sits being put on you to make sure that you domain tan a strong, competitive position? >> no, really, the primary requirement that was placed on

us was that we expand the brewery that we're purchasing in mexico to handle the entire business of crown. right now it produces about 60% of our crown u.s. sales and therefore we'll be expanding the brewery to 20 million hectaliters which will supply 100% of crown's requirements for the next, say, ten years or so. >> rob, finally, give me your sense. you mentioned the high-end part of the market for your wine and now for your beer. where does that consumer stand and what are you seeing from them given -- it's hard to read where we are in this economy. >> yeah, it's interesting in that in wine, there continues to be very strong trading up, so the higher-end segments are growing at a faster rate than the lower-end segments and in

beer we see the same thing. our portfolio, model on esp/essial are growing at the fastest rates for the import segment and the kraft segment is growing. it's the domestic, lower-end beers that are not growing as fast. strong trading up in beer and strong trading up in wine. >> rob, we're going leave it there. >> interesting trend. rob sands from constellation. e st 20 bucks last june and now approaching 50. that's why he's got a smile on his face. >> thank you. >> the smart phone messaging app that could safe you big bucks on your next cell phone bill. we'll kick it around with the ceo of messenger later on. >> plus the inside scoop on what cyber criminals want from you, the good, the bad and the ugly. as we go to break, take a look at the rally. now up triple digits and that's

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>> dow rallying up 130.

we were up at 140. we're here with peter costa, getting half our losses between today and yesterday. what's going on? >> it's money moving back into the market. i also -- people are anticipating maybe leak there were a lot of people yesterday feeling that apple might not perform as well as expected, and i think there are people taking a shot on that one, too. so it's not on much volume, but we'll take anything we can get to retrace some of our steps. >> interesting levels above 1570 and 1571, numbers we keep hearing about. >> that's what everyone is talking about. i was thinking of 1575. i like more room. i think 15.75 is a nice thing to shoot for. you know, we'll probably see it today. i do think we'll see it today. >> 24 members of the dow are higher and bank of america had an upgrade and dupont reported and travelers reported and they're leaving the dow.

changing our impression of earnings season. >> you have to start looking at earnings and say they're better than what we thought they were going to be. everyone was talking about such a middling period and we're see something better reports, and i think the s&p numbers is 72% or above their reported estimates. >> revenue was the issue, though, isn't it? you've had data from china, data from europe saying that the world is doing impeach the u.s. economy is better than everyone else and when you're an investor you have have to know where the best chance of of making money is, and we have some hopes of the earns cb getting more accommodating this? >> europe was up earlier, and i think europeany woo, that's a

thought, and i don't think that's what's fuelling in today. >> you don't have a dislocation in metals like the week before last. there was an argument at the time that the fundamental market would catch up to the players that were out of position at the time. >> i don't think that -- i think this is a much more -- like you said, it's a much more fundamental approach to investing and people are getting back into the stocks. what ide like to see is individual investors getting back and we don't see that yet. there's room for the individual investor to get involved and when you see that the market will be a lot higher from here. >> if and when. >> peter, thanks. peter costa. >> turning now to the investigation into the boston marathon bombings, cnbc's senior correspondent scott cohn joins us. scott? >> reporter: hi, david. it's been a while before we used the term event risk in the market coverage on cnbc and if there's any doubt that event risks still exist. you don't have to look further

than the hundreds of businesses behind me in the copley square area of boston who have been out of commission now for more than a week. there are now efforts to get them back to business. yesterday a symbolically the fbi turned boylston street back over to the city of boston and they are now working on getting the businesses back. they're actually going to be going there in shifts. they're starting as of this hour, a lot of clean up to do as well as counseling and trying to get this important part of boston's economy back online. meanwhile, despite all of the video evidence, the surveillance photos and so on of last monday, the mother of the two alleged bombers is still in disbelief. >> what happened is a terrible thing, but i know that my kids have nothing to do with this. i know it. i am mother. i have -- i know my kids. i know my kids.

>> dzhokhar tsarnaev, in his hospital bed in boston has reportedly been cooperative with investigators telling them that he and his brother acted alone without any support from overseas groups and that they acted out of religious fervor. nonetheless, if they want evidence that there is a threat look north to canada where authorities arrested two people breaking up an alleged plot to derail amtrak trains bound from toronto to new york on the canadian side of the border and there the authorities say the suspects were not acting alone. >> individuals were receiving support from al qaeda elements located in iran. there is no information to indicate that these attacks were state sponsored. >> those two individuals due in court today. more evidence that we do need still to be vigilant.

guys? >> okay, scott, thank you very much. scott cohn joining us there from boston. in business news, in the most anticipated earnings report from the season we are now hours away from apple, from stock market darling to stock market dog has shed almost $300 billion in market capitalization from the high that it set back in september. it certainly lost its title as the most valuable company. michael copeland is senior writer for wyatt and he johns us as our own john fort from the west coast. michael, you've written a list of five things that you think tim cook should do tonight. i'm fascinated that the first one is a great, big, mea culpa. it's all gone horribly wrong. >> you don't tim cook to be completely tone deaf to the market and thus far, tim and apple hasn't really acknowledged that there's this almost $300 billion loss in market value, and you would like him to

acknowledge it in some way and that could come as a dividend and that could come as a hint that, yes, we know we need to respond to wall street, but you want some acknowledgement. >> how are you, you can imagine that the guy might say why should i throw in the towel for these people that are so down beat on me they think we're a value play and not a growth company. his job is to believe in growth. why start tinkering with the balance sheet and tinkering with cash shareholders and that's not what you employ the ceo of apple to do, surely. >> you don't employ him to do that, but you also don't employ him to be blind to what's going on in wall street. he doesn't have to sea, look, i'm doing this for you to investors, but he needs to give them something they can grab on to so, yes, if they return cash to shareholders, it would be a buyback and something people can

look to and say i know he's responded to our needs. ? i know you read through is the five things we should look for tonight. what stands out to you? >> first of all, we have to give a shout out to my man copeland. we used to work together, it was a sob to investors. we do care. i wouldn't be surprised at apple's fbs, and it looks to pea leak the real problem started with 2011 with the iphone 4s. they launched that in the holiday season. it started spiking. i think what cook really needs to do and he's been trying, it looks like thus far is to bring some stability to apple's numbers and to continue telegraphing things better and show that their guidance is real and understand sandbag anymore and we'll get the first evidence of that in today's numbers.

>> that's a good point, john. >> john, where is the line between trying to build what jim called pizazz tonight in the call, right? getting people excited about the promise of another product versus overpromising something that they really don't have in the pipeline yet. how does he characterize what is to come? >> i think he should keep doing it the way apple's historically done it which is to say wea've got a lot of exciting things in the pipeline. there's been this myth developing over the past few months that apple has had transformational hits every two years for the entire history and that's just understand true. apple has gone three, four years. as an investor you have to be prepared for there to be little lows where apple concentrates on apple and software or services instead of some completely new hardware category.

>> are you still fundamentally a believer. yes, i believe that apple will come up with some new product category, and i think it's one of the most inon investive quality and what is there, michael. what would get you excited and one of the places where apple is behind and google in particular are web advocations and as everyone gets better and better, apple will need to step it up on the software side. >> we'll leave it there. it's a big day. it will be a big morning, tomorrow morning as well as apple hits the screens. for the moment, thank you very much. michael copeland and john voss. >> home prices may be on the

rise, but is the real estate game still about location, location, location? of course, it is. we'll take a look at how you can get the best bang for your buck next. this friday a global exclusive interview you won't want to miss. mcdonald's ceo don thompson will sit down with carl quintanilla in a global exclusive interview. you want it, need it. you've got to have the taste of "squawk on the street," we'll be right back. is.

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. >> all day today on cnbc we're showing you what $1 million can buy you in terms of homes. we sent six reporters to six different real estate markets to check out essentially a $1

million home. we have dolly lens joining us to crown the top home. a pleasure, as always. we'll show you two side by side million dollar homes and to make it more interesting we've asked the reporters not to reveal where the home is located and only dolly knows where the homes are and she'll reveal that after we get a look. earlier in the day a million home called the painted lady in chicago went up against a million dollar home in new haven connecticut. painted lady one. now in round two, that goes up against the greek titan and only dolly knows where it is and we'll find out after we take a look. touring these homes is our own diana olick and brian shactman. >> this victorian sits on a third of an achel with lake access, mature landscaping and a hot tub on the back deck and a three-car garage. it's unique facade is known as a painted lady. >> this classical revival style three-story palace was first built in 1973.

it has a carriage house that's now a four-car garage, an elevator and even a barn. >> this wide-open floor plan boasts 3700 completely renovated square feet plus a finished basement and it has stained glass throughout and one of five fireplaces right here in the kitchen. >> more than 11,000 square feet. >> eucalyptus leaves and nine fireplaces including this one in the kitchen. it's no wonder that this home played home to presidents, cabinet members and even military generals. >> the stained glass follows you up the main staircase where you find six bedroom, three bathrooms and a very rich history. you can almost feel it here in the master bedroom because this house was once a brothel. >> for this homestand arts, a relatively modest master bedroom, but what it lacks in size makes up for its sheer quantity. ten bedrooms, more than six bathrooms and the bonus, a second-floor kitchen. >> the owner here is an expert in stress management which you

can tell from this bonus master bathroom renovation. a desert oasis complete with a quadruple jet steam shower. >> asking price, $985,000. >> if you want a mansion easing with the greatness of a bygone american era, ten chandeliers throughout the home and they put in central vacuuming in 1912. you can have it all for $999,900. >> all right. let's welcome dolly back to post 9. dolly, we know the painted lady is in chicago. we are wondering where secretary of stateman is with this greek titan. 11,000 square feet? >> 11,000 square feet and you heard the tape, so you know that presidents were hosted there. a bygone era, and what do you think it is at under a million in where are we? >> georgia? >> i'm going say charleston. >> good guess. >> i'm going, that area of virginia -- well, virginia would be more expensive, i would say,

maybe -- roughly in that area. >> you want to change your answer? >> is that your final answer? >> features like the stained glass window on the other one and the painted laidet and fact that it was a former brothel, are those selling points? >> think the fact that it was a formerpoint. for real. it will be picked up. so media will pick that up. people will see it. if they see it, they might buy it. >> so are you going to lay it on us. >> i'm going to lay it on you. it is york, pennsylvania. >> pennsylvania. >> and it is really serious bang for your buck. under $80 a square foot. the garage $1 million. now imagine we're talking about a house now reduced to $899,000. 11,000 feet. all that history. all those chandeliers.

>> can they not sell it? >> the employment situation there is not terrific. there's a lot of product on the market there. and a lot of product coming on the market through the foreclosure process. so there's a lot of competition. and that's the main problem. >> you haven't sold anything below a million dollars in years, have you? >> i recently sold something for $2 million. i rented something for $3,000 a month. we follow the client. so we're a service business. >> so between the two, chicago and york, better value? >> well, without question, metrics say it's york, right? but you really have to go with what is going to appreciate the most in the next five years. if you ask me, there's no question, it's painted lady. painted lady is in a top suburb of chicago.

it's an exciting place to live, right near chicago. that's going to get the buyers. >> i like this game. >> we are going to do this all day. so the painted lady wins, according to dolly. round two. do you agree? join the conversation. can it win the next round when it goes head to head with another million dollar home in another mystery location. dolly will be on "power lunch" to see how it unfolds and then she will crown the top house during closing bell this afternoon with maria. how long you been working on this? >> just this? >> this whole setup? >> oh, gosh. over a month. >> this has taken some work. >> a lot of work. >> now it's rivalling apple for excitement on the network. >> exactly. thank you so much. in the meantime, if you are worrieded about the data coming

through, rick santelli will tell us how it all affects american investors. it's the santelli exchange on cnbc. how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one. combining your customized charts with leading-edge analysis tools from recognia

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welcome back to "squawk on

the street" and tuesday's edition of the santelli exchange. last week, wednesday. 17th, we saw that german auto sales, they call them registrations, let's talk euro zone all together. we're down over 10%. specifically germany really suffering on the lines of profitability and a very quick drop in interest in new autos in europe. what are the reasons? well, that would take two more santelli exchanges. but i like something i said in a reuters article. it says specifically about the plant in germany, the first closure of a car factory in decades. some say all the way back to world war ii. why is this important? i know. stocks are important.

if we look at the stocks in the u.s. they're obviously at has toric levels. with really weak data, still virtually unchanged after a rally took it down 1.75%. let's look at what we have. if we look at a former president and prime minister of portugal, he's been saying he would prefer default to austerity. the least popular leader in france in over three decades and then news out of germany. the backbone. this closure. these facts are important on a number of fronts. if you really want to keep track of what is going on in europe proper just continue to monitor the german stock index.

>> thanks so much, rick. when we come back, find out how internet sales tax could affect retailers and your online shopping experience. no, thank you. we know you're always looking for the best fill price. and walk limit automatically tries to find it for you. just set your start and end price. and let it do its thing. wow, more fan mail. hey ray, my uncle wanted to say thanks for idea hub. o well tell him i said you're welcome. he loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. yea, and these ideas are across the board -- bullish, bearish and neutral. i think you need a bigger desk, pal. another one? traders love our trading patterns, now with options patterns. what's not to love? they see what others are trading -- like the day's top 10 options trades by volume -- and get ideas! yea i have an idea: how about trading that in for a salad? [ male announcer ] so come trade at the place that's all about options and futures. optionsxpress. open an account today and get a $150 amazon.com gift card when you call 1-888-280-0154 now.

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"squawk on the street." here's what's happening so far. >> we had record results from our agriculture segment with sales up 14% and earnings up 13%. so we're having a strong start to the north american season but weather is going to have a big impact on how it plays out. >> you're going to have more efficient money flows but in every case they're going to be trackable. through the trackability you can track corruption, the other things that the devil mentioned in the third world. >> i found myself thinking this company has gone from being overpromising and underdelivering to being a major over promise. we have to get away from the quarterly analysis of apple. we need them to say we have a killer new device. you'll never look at samsung again. there's a reason why it went from 85 to 100.

it has a great balance sheet. it has fabulous management. that's why it's good to work with. >> it positions us as the largest multicategory beverage alcohol company in the united states, that's a company that has all three categories, wine, beer and spirits. >> good tuesday morning. we're live here at post 9 of the new york stock exchange. the dow just likes tuesday. 15 consecutive up sessions on tuesday. today the dow's tuesday gains have made up 7 # 0% of the gains all yearlong. that's just stunning. s&p is up 14.5. coach soaring more than 10% after posting better than expected results with earnings rising more than 6%. also increasing the dividend

beginning in july. gold is off today. that dropped weighing on the mining stocks. new mining hurting the most. one of the worst performers on the s&p. netflix soaring after a huge beat in the quarter. does this finally confirm the bold case? we're going to show you how to play it. plus the street is waiting for apple to report after a 10% drop in this month alone, we'll find out if the tech giant can give investors a reason to buy. kik just raised $20 million in funding and did we mention they already have 50 million active users the kik ceo will talk about why he's not intimidated by competition by facebook home. and netflix is currently trading at a 52-week high today. last week we spoke to btig media

analyst richard greenfield on the day he initiated coverage with a buy and a price target of $2.50. rich, good to see you. >> thanks for having me. >> what gave you so much confidence and is it rich enough now? >> take hbo, for example, think about how long it took hbo to go from a show called "dream on", to the sopranos. we can have a heavy debate on whether house of cards was great television. and the importance of this is very few of the overall hours are watched on original programming but it defines the brand.

and several more series over the next 12 months you are changing how the public perceives netflix and really doing a lot of marketing through the popular press and general word of mouth and social media. i see your point about the marketing being done for them. they're no longer seen as anning a -- as an aggregator. how much do you think of that was house of cards related? zbr i think it helps drive down long-term turn. in the near term more people are walking. 87 minutes of viewing per household per day. that's up from just over 60 minutes in 2011. people are using their netflix more and more every day.

then later on the intangible quality that we deemed it. you don't want to cancel for big series. there's always something to watch. as you watch more and more churn just goes down. as you start to see churn tick down, the ability of them to outperform is why we put a buy on the stock last week. >> i want to know with 2.50 target, we're not far away f you can recommend clients getting into it with fresh money. and there was always a lingering worry about content cost. >> i think ast youz saw last night they are making good progress and there's a lot more

people using the internet outside the u.s. than inside the u.s. international provides another leg of growth. as we get more comfortable that may give an upside to investors when you look at netflix they have basically paid up for whatever they can get their hands on. whoever was selling programming, they had to buy because they had to get to bulk now that they create their own content, other people's content is less important. every cable network evolves from buying other people stuff and paying up for it to financing and owning their own catalog of content. i think they're actually going to have more and more leverage over their content cost than investors currently realize and give them credit for. >> yeah. you can probably arguably afford to spend a few million an

episode on a house of cards rather than paying somebody else for what they paid to make something. >> as long as it's good. if you were making horrible stuff nobody was watching, then you have a problem. if you overpay on stuff you think will help your brand, you have a problem. when you look at house of cards, this is very good for netflix getting into the category. arrested development will do more for gross additions. people may sign up to get access to arrested development. and unlike "house of cards" which you watch once, some "arrested developments" could be something you watch more than one time really giving longevity to it. >> i need a disclaimer. my wife and i can have blown through the first series of house of cards. rich greenfield, now to apple. today is the day apple is is to

report shares down 25% year to date. 52-week low. horrible week last week. managing director with raymond james has a buy rating with a $600 target and an apple shareholder, principle and portfolio management. good morning to you both. good morning. >> is consensus significantly depressed to where tonight will not end up to be a complete disaster? >> i think the consensus is significantly lower than what you see on the cell side earnings expectations. so especially the most recent 10% tick gown in stock in the last few weeks we built la lot of negativity into the june guide. my hope is, even though i don't expect a great june, maybe the market has overreacted on near-term negative trends. >> your expectations for iphone?

>> so 36 million for the march quarter going down to 24 million for the june quarter. and a big bounce back in september to over 40 million. really driven more by the launch schedule of the iphone 5s and having to clear out inventory prior to that than anything dramatic happening in the markets. >> you have 23,000 shares. your worry as you go into tonight. >> well, we're certainly a long-term shareholder of apple. what happens tonight or the guidance for the june quarter i'm not going to say it doesn't matter, but we clearly expect some weakness in both this quarter's earnings and next quarter. looking out as tavis mentioned, the new product cycle and the install that we have, we want to achieve stock regardless of what happens on a quarter to quarter basis. >> your argument appears to be that samsung is more of an other

android killer than an iphone killer per se, do you really believe that? >> well, so far the data has really shown that. whether last year's market share data that showed samsung taking out htc and lg and other android players while apple gains shares do midwestically and abroad, you look at verizon's numbers and clearly iphone is taking a sizable share of smart phone customers. i get the sense that smart phones have not been selling as well. perhaps that has caused concern. >> the whole world is looking forty on cash distribution. what is clarity tonight? typically they would not pin an announcement about cash to the earnings. what's possible? >> yeah, i don't have high expectations. nor do i think it's that big of

a deal. let's not lose track of the fact that apple already pays out all of the u.s. cash flow in the form of a dividend or a buy back. it wouldn't shock me if some time before the screen i understand we see an aggressive buyback. a year from now we're not going to care if apple raised the dividend or increased the buyback in april of 2013. we're going to care about is the subscriber base growing? did they come out with an apple tv? are they moving to different form factors? all of these things can drive growth. you really only need one of those things to go modestly okay for this stock to work from here. >> yeah. that's a long-term view. a lot of short-term traders hoping for something more clear tonight. but we'll see. thanks so much. timothy tavis talking on apple today. let's go to amin in d.c. >> hi, carl. nbc news is reporting that

senator max baucus is the chairman of the senate finance committee. not going to run for re-election next time around. that throws open a washington game of musical chairs here as to who will get the gavel. they are so involved in writing tax policy in the country. looking at the list, you see senator rockefeller will be in line. he already said that he's retiring. so ron widen, a democrat from oregon state would be the guy in line here. he is a more liberal senator. he recently participated in the filibuster on drones. a roguish personality here. it's not a guarantee he will be the guy who gets the chairmanship. somebody else more senior from another committee could bump him.

>> thanks. the market is surging today. we will show you how you may want to play this rally here. first rick santelli is going to talk housing in the show. rick? >> absolutely. there was never much talk about reforming the gse like freddie and fannie when they were losing money. there's a lot less talk about it now that they are starting to make some money. we have dr. anthony sand ers on and he will talk about that and who may replace ed demarco. you see him every first friday on cnbc. you have to tune in and talk about this one. ♪ [ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love,

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welcome back to "squawk on the street." i'm josh lipton. nice pop for metlife pleasing income hunters. the largest life insurers in the u.s. increasing the quarterly dividend by 49% to 27 .5 cents a share. metlife up 14% this year. up 6% this morning. carl, back to you. >> thanks so much, josh. markets are higher this morning. it's the 15th straight tuesday of gains for the dow. we haven't seen a speak like that since 1927. steve's web bush security managing director joins us this

morning from out west. steve, good to have you again. >> good to be leer. >> you know, one of the big arguments by the bear is the dips have not been bought with as much energy as they were earlier in the year. i wonder if today is a repudiation of that. >> well, i don't know what the bears are talking about in terms of depths. on a closing basis, 1.5% correction the first quarter of late february. we just got through a 3% correction. so the remarkable thing about the rally is also consistency. we've had very little in the way of declines. it's been straight up. >> yeah. we haven't had three straight days down on the dow all yearlong. which, i'm sure you can sympathize. even those participating in the rally, it makes them uneasy. >> well, it does. it also makes it uneasy. what is really prompting the rally is two things.

it's incredibly easy money. we have three of st largest banks in the world. clearly that's driving money into equities market. we're in unchartered territory in what happens as the stimulus ceases to exist or has really little impact on getting economic activity going. the second thing that has been very good is profitability. it continues to break to an all time high. we have another quarterly earnings season in front of us. it will be critical to see how this earnings season plays out so far it hasn't been that great on an overall basis. we still have a lot more data on that front. >> clearly. we're barely cracking the

surface. are you a fan of the seasonal theory that in keeping with the past couple of years, we will see some sort of spring swoon? # eventually give way to give back in july or august. well, clearly there is a tendency for the market to do this. there's a seasonal tendency over time. it's something that you have to look at and appreciate. but once again we're in the unchartered territory. what really got the market going in my opinion is the feeling that the ecb is about to loosen more. recently is the ecb, some fraction of 1% right now. so, you know, what does this really mean? is this a normal year? is this a normal cycle?

i think not. you have to look at some of these old traditional sayings and wonder if they really apply this year. >> history in general doesn't give us much of a guide. >> exactly. it's unchartered territory, really. >> steve, thanks, talk to you soon. coming up, what an internet sales tax may mean for your online shopping bill after a break. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds

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welcome back to "squawk on the street" and welcome my guest

anthony sand ers. welcome, mr. sanders. >> thanks, rick. >> listen. i never thought i would ever have to ask some of these questions. truly, it makes me sad. do you think there's a chance any time soon that we will privatize housing again? with over 90% of the finance activity going in, it definitely has been taken over. whether that's a good or bad thing isn't for me to say. >> no, it's like the old bumper stickers on gun control where they say you'll have to pry fannie and freddie from my cold dead hands. >> all right. should it be considered a good or bad thing that the gse's are now starting to make some money? will it change the outlook of the privatizing process?

extend it? >> absolutely. all the the talk of privatizing is calming down. everybody is saying, oh, good. the government can have a private partnership that works. they forget about the $180 billion that didn't work. no, they like us now. >> currently we have historic low mortgage rates. do you think that the housing industry, "a", do you think that it's doing better? >> it's doing slightly better. we set mortgage rates at 3.5%. we're getting down near the zero barrier. i think consumers are a little bit disinterested. >> do you think ed demarco is doing a good job? >> i think given the mess he's had, doing a fantastic job. look at fannie's profits. this is amazing. >> there's a lot of pressure for him to have principal

forgiveness. he doesn't think it's a good idea. he has studies to back them up but he may be replaced with somebody cnbc is familiar with. have you heard the name? >> yes, it's mark zandy. >> mark zandy is a smart guy. he believes in stimulus spending. if he replaces ed demarco. do you think principal forgiveness will come to be? >> look, he's very smart guy. this is also the will rogers of loan modifications. he never meant a loan modification project he didn't like. he loves principal reduction. >> you basically answered my question. viewers, stay tuned to who ends up running fhfa. carl, back to you. >> i assume our calls are out to mark for comment. rick santelli in chicago. a few minutes left in europe's trading day. the dow hanging onto a 140-point gain. we'll get the details on the

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data was bad in europe this morning, but simon, that does not appear to matter today. >> it's probably the reason in some form as to why you see this very strong gain on the stock markets.

look at the figures there essentially the data is so bad now in europe that the european federal bank is going to have to act. it will have to do something when it meets next thursday. so you see that portugal and spain are up 2%, 3%. italy is also doing very well. the portuguese banks are up 7%. have a look at the majors that we have here. notably france, where we're very concerned about where we are. up 5%. major banks using even higher to a greater extent on the expectations that the ecb will be forced to do something. so the yields go lower. look at that shot. that is a year to date shot at the short end. you're going down to record lows

despite that they have such problems. let me show you the day that that sparked it. they pushed together manufacturing and services. we have been stuck at the 46.5 level for about a year. so for about a year all the eurozone economies are retracting. that's quite good data for france. better than we had. still way below 50. the view is the ecb has to do something. the rate cuts. maybe it's more cheap money. some are talking about the possibility of q erk. in the meantime, we're also watching what is happening in italy. the new italian president who didn't really want the job at 87 was very angry when he spoke in saying get your act together essentially. there's now a fast round meetings that will finish within

the hour of which he basically wants a new government to have been formed. will it hold together? it may be enough for a further rally on asset markets. >> when 44 is an improvement, that's tough. thanks a lot. let's get a check on gold. a lot of news surrounding it today. sharon epperson is with us. hey, carl. the sovereign spreads are one of the reasons that we're seeing the selloff in the gold market. we are looking at prices that are slightly lower than we were after a three-day gain. and the prices seem to be testing that 1400 left on the downside. there still seems to be some physical demand for gold coming in, and it's been considerable. we talked about the u.s. mint and what the levels are there. we're also seeing extremely strong buying in asia ya.

we are seeing out of india the strongest physical demand we have seen since 2008. there are still skeptics that say the gold prices are going to go lower or maybe consolidate around the level. ubs is the latest bank to lower their forecast saying the one-month target is 14.25 an ounce per gold and a target of 15.25 an ounce. they may see gold prices rebounding later in the year. but for now they're looking to gold to hang around these levels. back to you. >> very interesting. that goldman call to close out the short. very interesting. bob pisani is here at post 9. we're talking about what is going right today. a bunch of things. >> i am happy. last week we had ge down. these are big international companies. talk about slowing global economy. if that is a real problem, we would have seen big industrials today. united technologies, johnson

controls all lowering their numbers. they didn't. so all of these companies here reported today. all of them beat on the bottom line, they were light on the top line. that is a continuing problem. but most importantly, they beat on the bottom line. don't worry about the declines. united tech was at a historic high. they were a little cautious on the second quarter, but a little bit of relief. this is one of the reasons the market is holding up so well. let me summarize the good news on the big industrial names reported here. unchanged. moeb drop the 2013 numbers. big sigh of relief. revenues continue to be light. now there's pressure on them. they have to make sure they do well on the back half of the year. that's the problem for them right now. let's talk about other things moving here. airlines. how about what is going on with

the airlines? look how well the numbers are doing. delta had an absolutely great quarter. delta said the magic words. we are well positioned for improvements and profitability. it doesn't get better than that. two things happened that were important. new home sales better than expected. thank heavens. kpipting home sales were not. and barkley's upgraded the whole group here. home prices rising faster than anybody thought this year. now bring up the earnings for the quarter. i want to show you the good and the bad news. i love that 69% are beating. we have 132 companies. that's about 25% reporting. now the historic average is 62%.

now here's what i do not like. 42% beat on revenues. ugh. historically we only have 62% beat on revenues. this is the ongoing problem. the top line is not contributing to the bottom line. this is the primary problem facing the markets. tax-free shopping on the internet could be a thing of the past thanks to a new bill making its way through the senate. a look at how internet sales tax may affect our online shopping experience. >> that's right, carl. we talked about it on the business side, but what about us, the consumers? it aims to even the playing field for online and offline retailers when it comes to collecting sales tax.

so breaking it down in a micro level. when the zip code clearing the revenue. a purchase that would have cost you $100 without the marketplace fairness act will cost you $107 for the legislation passes. that's assuming they offer the free shipping that they do at times. another big advantage for the larger retailer who is can absorb to tafrd the cost. a number of studies show this type of sales tax has an impact on online shopping behavior. only 8% of consumers say that taxes actually are a priority consideration. amazon already collects sales tax. the current law requires them to collect the sales tax for online purchases if they have a

physical presence in the state where the consumer lives. if the legislation passes, though, online retailers with revenues of more than a million dollars a year could be faced with the task of keeping up with 10,000 different tax jurisdictions. even though all of us are supposed to claim uncollected sales tax on the filings, i bet most of us don't. >> 10,000 tax jurisdictions. that's ridiculous. >> it's a lot. thanks a lot. airlines, railroads and the all important apple. all those reports out today. and the earnings squad standing by to break it down. this can save you hundreds of dollars on your cell phone blil. why millions around the world are kicking it when the ceo of kik messenger joins us live.

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[ beeping ] red or blue? ♪ welcome to the earnings squad where we dissect the stories you heard about. i'm melissa lee and today cnbc's josh lipton is along for the ride. let's get to the score card with 26% of companies reporting so far. 10% beat their target. 10% net estimates. 20% below forecast. today as you may have noticed is one of the busiest days for earnings.

let's get to it here. we have washing shares of xerox coming. they expect to u reinvent themselves as a services business. herb, you've been following this one. this is a classic story of who prints anymore in when was the last time you printed anything? >> i have to tell you something. the as much as i really, really like her. i just don't know if she or anyone can do it. when you take a look at it, the revenue groult is falling. the margins are falling. they have challenges in the printing business. and in several comments in the press release the says they're continuing to shift the business model and changes will result in increased margins to which i say you have to actually make that happen. there's been a lot of time to make this happen. or is this wall street where you want to give anyone a long time to make it happen?

>> that is the question. can it catch up fast enough? >> that's a nice year to date. but you look at the commentary. the bookings were very good. seeings reaction to that. and a decline of 43%. hardwares were 9%. the consumer business going for the business side of things, the ber surprise customer, but it's not doing it fast enough. >> look at the stock pop up. >> low expectations here. >> that's a classic wall street situation. look at the the growth of the company on the rev new line. on the earnings line, it still has a long way to go to be a quote/unquote turnaround. >> and one of the biggest movers is arm holdings.

15-year high. it benefits because it designs chips. they feed into the smart phone business. arm is at the the sweet spot. they feed into that business but they don't have to make anything. >> oh my goodness. 94% margins. this is a similar design business. 92% margins. >> and then you look at intel. 56% margins. >> you make them or not. that stock is also up 60% in the past 12 months. >> and a two-year chart of arm holdings in a semiconductor. you can see why the stock is outperforming by a live margin because of margins. is there going to be something that comes along?

yes. >> we're also watching shares of radio shack hosting the fifth quarterly loss. the stock is in fact moving higher. >> i love the radio shack store. >> we love it. i love the story. so here is what we heard. the stock is popping. talked to the analyst this morning. one, listen. there's still optimism and confidence in this new ceo. hired in february. he had a great rep. they said that was more than somebody else. >> this should be radio shanty. when you listen to the calls as i went to the transcript, there's a clean slate type of situation. got some liquidity. >> this ceo is a heam put

together. he doesn't have any influence? >> billion dollars liquidity. so that is a concern as well. it will it want to tackle it if you want to join the conversation, tweet us. we'll be back during street signs with much more. meantime, much more "squawk on the street" straight ahead. ♪ can you kik it? yes, you can. in fact, 50 million people are already kiking it with kik messenger. why this could be big trouble for social americas like facebook.

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♪ ♪ how lucky can one guy be ♪ i kissed her all right. up next on the half, strong earnings are driving stocks higher. why does a hedge fund manager trading with us today say the rally won't last. after a blow out oh quarter is the sky the limit for netflix? a halftime debate you can't miss. and he's called the oracle of tampa. the one man band money manager with a track record of beating the pros tells you the stocks he's buying now. see you in ten minutes, carl. >> can't wait, scott. create profiles, build

networks of friends, share photos. might sound like facebook, but millions are turning to a new wave of messaging acts. one called kick. it has more than 50 million users and has raised $19.5 million in financing. ted livingston is the cofounder and ceo of kick and joins us from toronto. ted, good morning. good to have you back. >> good morning. thanks for having me. >> 19.5 is a fair amount of coin as people like to say. what are you going to do with it? >> we have a service that's going fast and we need servers to support them. on the other side hire smart people to build out the platform. >> you just announced a new milestone. 50 million users up from 30 million in november. you're adding more than 200,000 a day. too much growth too fast or not? >> it's definitely challenging.

when that many people are getting on the service to add servers fast enough is hard. we have an amazing team that works around the clock to scale it. it's a challenge but it's a good problem to have. >> we tried to lay out at the top here the competitive landscape. it's crowded. just for example people may know the competitor, b what's app, recently squashed a rumor b about a $1 billion potential acquisition from google. that got killed pretty soon. is that good or bad for you if it were to happen? >> it's great. any time you have a competitor that gets sold you turn this very hungry team into somebody that's just serving their time at their acquirer. so it would be great for us if they were bought. that said, we're excited to compete with them. >> on the flip side, you have facebook now unveiling home to be as mobile as people can on

that product. how much of a threat? >> i think facebook home is just facebook saying clearly that technology is all about mobile and mobile is all b about communication. i think it's great for us. you have a huge social thurk saying, we are behind the mobile, the tech. that's where we're a leader. it's cool to see them following us. >> yeah. you have an interesting background. you went to the university of waterloo. >> yep. >> you were an intern at r.i.m. in 2007. in fact the whole thing came out of a rimm experience to the point where there is a little bit of a legal dispute between those guys and you guys. what's going on? >> i worked there in 2007 as part of my internship program in engineering at the university of waterloo. the cool thing for me is i got to see mobile before the iphone existed. me and my friends who worked there had blackberry with a full data plan. it was there i saw mobile would be a big thing. the whole legal thing happened

down the road and was unrelated. >> and there is suit against you for patent infringement. >> yes. >> is it resolved? >> still on going. >> still ongoing. i imagine you don't want to comment much on that. >> yeah. >> overall, sour grapes? are you positive, negative on their chances, on the strength of the new blackberry? >> i still carry a blackberry. everybody goes, why are you doing that? you must be crazy. i can't give up the physical keyboard. i'm bullish on physical keyboard devices. >> the space you're in is something we are watching closely. we hope you will come back. >> i think we're back. 50 million users is crazy. >> ted livingston, founder and ceo of kik from canada today. thanks. as we said earlier all three indices are up now. we get a look at the big movers when we come back. plus your answers to the

twitter question ahead. how will netflix change your life? back in a minute. d wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it.

transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business. spending cuts related to the sequester are causing delays at airports across the country.

jackie, good morning. >> travellers and passengers are bracing for delays. they blame it on furloughs from the faa. the faa intends to cut 10% of staffing. that's to save roughly $200 million coming out of the $637 million that it needs to cut from its budget. now the board behind me shows we are with seeing delays of 15 to 45 minutes in terms of the departures. in terms of the arrivals we are seeing 30 to 45 minutes. of course that's due to congestion. we have data that shows yesterday more than half of the flights at this airport did experience a delay. in addition to some security concerns, of course, from the furlough, how this is going to impact airlines and the broader economy is a big issue. southwest estimates the cost

could be $200 million a year for that airline. american, of course, a bigger airline saying that it could cost them $650 million a year. carl, a couple of caveats to think about. of course weather could be the biggest reason you see flight delays. we had windy conditions here in new york city. everybody was willing to point the finger at the sequester. the other issue, of course, is the fact that you have different traffic patterns on different days. while sunday and monday might have seen light traffic we could see increases in the traffic and the delays at the end of the week. back to you, carl. >> it's such a tough call. obviously there are delays in the northeast all the time. there were high winds yesterday, but if there is a sign that it's more than usual you will feel the heat, especially on politicians. jackie deangelis at laguardia, thank you very much. >> exactly. >> as you know, netflix beat the street last night. stock's up 25% today.